The Hospitality Industry Report - Zeta Global

The HospitalityIndustry Report1H 2020

Table of ContentsWhat This Report Will Cover. 3Key Insights. 4Bookings. 5Site Visits.6–7Booking Lifecycle.8–11July 4th Spotlight. 12Best Practices for Marketing in Uncertain Times2

What This Report Will CoverThe Hospitality Industry Report analyzes global trends in hotel website visitation, prebooking site activity, booking details, booking values, and length of stay. The informationincluded in the report is aggregated to show trends over time and by hotel tier. Everythingyou are about to read is based on based on first-party data gathered from 12,000 hotelproperties and more than 25 hotel brands, as well as third-party datasets.info@zetaglobal.comThe Hospitality Industry Report1H 20203

Key Insights1. The impact of COVID-19 on travel is softening, with recent demandparalleling January levels and recent case spikes not havingimpacted bookings volume to-date.2. Booking lifecycles have dramatically changed in a post-lockdownworld – lead times are over a week shorter than what they were.3. ADRs have steadily climbed over the last 6 weeks meeting thegrowing demand in consumer confidence4. Extended stays spiked during the heart of national shutdowns,paralleling needs to safely quarantine as well as rent/housingconcerns5. Most travelers decided to book their July 4th trips last minuteinfo@zetaglobal.comThe Hospitality Industry Report1H 20204

BookingsBooking VolumesDespite seeing a steep decline in bookings immediately following the nationwide shutdown in March, bothlower- and upper-tier hotels saw a steady increase in reservations throughout the second quarter. Year-overyear bookings in Q2 dropped 39% overall, and 61%, 42%, and 15% in April, May, and June, respectively.Daily bookings at lower-tier hotels are now higher than they were in January, while bookings at upper-tierhotels are only halfway back to their pre-COVID-19 level.Week-over-Week Booking TotalThe recent COVID-19 surge seen in certain parts of the country (namely the southeast and sunbelt) is yetimpact overall hotel traffic. Lower-tier bookings continue to show steady growth, and even though uppertier bookings saw a decline for the week of June 22nd, they remain 30% higher than where they were at theend of May.info@zetaglobal.comThe Hospitality Industry Report1H 20205

VisitsAverage Page Visits per VisitorSource: Zeta Data Cloud (Jan 1- Jun 30, 2020)Although upper-tier hotel bookings are still recovering, user engagement with upper-tier brands appears tobe back to normal. The average number of page visits per session by users on upper-tier hotel sites finishedthe second quarter at a 2020 high. This signal suggests consumers visiting upper-tier hotel sites are (likely)serious about booking a trip soon.Average Page Visits per VisitorSource: TSA checkpoint travel numbers for 2020Source: TSA checkpoint travel numbers for 2020Increases in daily site visitation are also being observed, and are correlated with the number of travelerspassing through TSA checkpoints since March.It is worth noting, however, that post-lockdown TSA traveler numbers bottomed out at 5% of the prelockdown figures, while bookings only decreased by 45%. This matters because bookings typically occurweeks and months in advance of planned travel, suggesting prospective hotel customers remainedoptimistic about the future of travel despite everything that’s going on.info@zetaglobal.comThe Hospitality Industry Report1H 20206

VisitsHotel VisitationSource: Zeta Proprietary PlaceIQ (Jan 1- Jun 30, 2020)Using location tracking data, Zeta observes daily visitation to actual hotel locations—year-to-date visitation(indexed against the first week of the year for the top 20 cities in volume) shows a steep drop in mid-Marchcoinciding with the start of lockdown.Certain cities defined by high-density, leisure travel (e.g. Las Vegas) were more affected than others.Fortunately, most of these cities are seeing a strong rebound in foot traffic, with a few metros (Tampa,Houston, San Antonio, Dallas-Ft. Worth and Phoenix) approaching their foot-traffic figures for January 2020.Interestingly, the cities with the highest increases in foot traffic are all in states that are now seeing a surgein new COVID-19 cases.info@zetaglobal.comThe Hospitality Industry Report1H 20207

Booking LifecycleLead Time vs. Length of StaySource: Zeta Data Cloud (Jan 1- Jun 30, 2020)Bookings in lower-tier hotels are back to pre-COVID levels, but the booking lifecycle is radically different.Lead times (i.e. time between booking and occupancy) in lower-tier hotels are almost seven days shorterthan they were in March, and 19 days shorter than they were in January levels. Conversely, the averagelength of stay is now 30% longer than it was in January.info@zetaglobal.comThe Hospitality Industry Report1H 20208

Booking LifecycleAverage Booking Value/Average Daily RateSource: Zeta Data Cloud (Jan 1- Jun 30, 2020)Source: Zeta Data Cloud (Jan 1- Jun 30, 2020)Source: Zeta Data Cloud (Jan 1- Jun 30, 2020)Source: Zeta Data Cloud (Jan 1- Jun 30, 2020)The average daily rate value (ADR) dropped by about 30% in late March/early April compared to where itsat in early Q1. This drop isn’t surprising given hotels needed to incentivize consumers to continue bookinghotel rooms in the face of steep economic uncertainty. Now that the economic outlook is less dire, ADR is onthe rise in both lower- and upper-tier markets.Interestingly, the average total booking value appears to be about the same across the first six months of2020. This “steadiness” is likely due to the fact consumers are booking longer stays, which is offsetting thelower ADR.info@zetaglobal.comThe Hospitality Industry Report1H 20209

Booking LifecycleAverage Booking Value/Average Daily RateSource: Zeta Data Cloud (Jan 1- Jul 5, 2020)Source: Zeta Data Cloud (Jan 1- Jul 5, 2020)Source: Zeta Data Cloud (Jan 1- Jun 30, 2020)Source: Zeta Data Cloud (Jan 1- Jun 30, 2020)The percentage of hotel stays lasting more than one week doubled in the Q2 2020 in lower- and upper-tierhotels (albeit to a lesser degree in the latter). Stays of 7 nights peaked during the heart of the nationalshutdowns in April, accounting for 7% of total bookings during that time in both tiers. This spike is attributedto families and essential workers needing to relocate for more than a week in order to quarantine safely.The cheaper prices offered by lower-tier hotels create a more affordable option for extended stays, likelyattributing to the larger difference between Q1 and Q2 in that sector.info@zetaglobal.comThe Hospitality Industry Report1H 202010

Booking LifecycleLead Time by Travel TypeSource: Zeta Data Cloud (Jan 1- Jun 30, 2020)In April, the average lead time for leisure bookings in upper-tier hotels reached a year-to-datehigh (more than two months in advance), as prospective travelers scrambled to postpone theirnonessential travel for later dates due to the national shutdown.info@zetaglobal.comThe Hospitality Industry Report1H 202011

July 4th SpotlightJuly 4th Weekend BookingsSource: Zeta Data Cloud (Jan 1- Jul 4, 2020)Looking at bookings for the July 4th holiday (7/1 to 7/4) there is a clear dichotomy between lower- andupper-tier hotels for lead time.In lower-tier hotels, almost 50% of travelers booked their trip within a week of check-in, compared to 30%of travelers staying in upper-tier hotels. Conversely, over 30% of upper-tier guests booked their trip morethan a month in advance of check-in, compared to about 15% of lower-tier guests.There is also a difference in the length of stays, with 20% of guests in upper-tier hotels booking for 4 nights, compared to 11% of guests at lower-tier hotels.Lastly, comparing the average booking values of trips for the holiday against a calendar helped to identifythe premium associated with trips starting earlier in the week. In lower-tier hotels, bookings with a checkin of Wednesday July 1st were 47% higher than the ABV for an average Wednesday in 2020. Whereasbookings for Thursday the 2nd and Friday the 3rd were only 10% higher than an average Thursdayor Friday in 2020. Interestingly, bookings with a July 4th check-in (Saturday) closely matched averageperformance for other Saturdays in 2020.Put plainly, it seems getting an early start to the holiday weekend comes at an additional cost.info@zetaglobal.comThe Hospitality Industry Report1H 202012

Contributing AuthorEric BambergerSVP Hospitality, Zeta GlobalAs the SVP of Hospitality, I am responsible for the overall vision and strategicdirection of the Travel and Hospitality vertical within Zeta Global. Previously, Iwas SVP of Hospitality at IgnitionOne, spearheading advances in direct bookingtechnologies for clients like Motel 6, La Quinta, and Extended Stay America.For more insights, contact Eric at ebam@zetaglobal.com.About ZetaZeta Global was founded in 2007 by David A. Steinberg and John Sculley with a visionthat data was going to change the way marketers engage with consumers to drivesuccessful business outcomes. Today, Zeta is located on four continents serving morethan 1000 enterprise clients, including Samsung, Toyota, Sprint and many more.Our data-powered marketing technology platform houses the third-largest data set inthe marketplace (2.4B identities) and combined with outcome-driven AI to predictconsumer intent, personalize experiences across every channel, and power businessgrowth for Fortune 1000 companies.Zeta Global3 Park Avenue 33rd FlrNew York, NY 10016USAwww.zetaglobal.comInformation in this document is subject to change without notice. Zeta Global. All rights reserved.

booking site activity, booking details, booking values, and length of stay. The information included in the report is aggregated to show trends over time and by hotel tier. Everything you are about to read is based on based on first-party data gathered from 12,000 hotel properties and more than 25 hotel brands, as well as third-party datasets.